Experts say expansion in the neighbourhood would augur well for India given slower growth of India’s exports to the US due to increasing USFDA scrutiny.Kirtika Suneja | ET Bureau | April 25, 2017, 05:30 IST

NEW DELHI: India is examining a proposal from Afghanistan to help set up a manufacturing base for pharmaceutical products, along with another proposal from Myanmar to supply generic drugs, as part of its efforts to shore up declining exports.

The department of commerce is closely examining Afghanistan’s proposal seeking India’s help in setting up a manufacturing facility for IV fluids as also of Myanmar, which wants to purchase generics in large quantities for its state-owned hospitals, officials said.

Myanmar’s health ministry is likely to give preference to pharmaceutical products from India in the procurement process, they said.

“Some of our neighbours import pharmaceuticals from Belgium and Pakistan... We are trying see if they would be interested in our medicines and formulations,” said one of the officials, who did not want to be identified.

Myanmar government’s proposal has elicited interest from nearly 70 Indian companies that want to expand their footprint in the neighbouring country. “CLMV (Cambodia, Laos, Myanmar, Vietnam) countries are a major hub... We want to focus on healthcare as a whole in that region and not pharmaceuticals alone,” said Udaya Bhaskar, director general, Pharmexcil.

Myanmar is already among the important markets for India’s drug firms as it sources 40% of its requirement from the country. In April 2016-January 2017, India exported pharmaceutical products worth $144 million to its Southeast Asian neighbour.

However, the industry is wary of war-torn Afghanistan. “Afghanistan is a small market for us and they source a lot of their medicines from Pakistan. It is not very lucrative for India,” said another official. Afghanistan imports more than 75% medicines from Belgium, most of which are made in India. Another 10% come from Pakistan and the rest come directly from India. In the first 10 months of 2016-17, India exported pharmaceutical products worth $53 million to Afghanistan.

Pharmaceutical exports from India decreased marginally in 2016-17 to $16.4 billion from $16.89 billion in the previous financial year due to absence of blockbuster drugs and delay in regulatory approvals in leading markets of the US, Russia and Africa.

Experts said expansion in the neighbourhood would augur well for India given slower growth of India’s exports to the US due to increasing USFDA scrutiny.

ET View: Raise quality, improve brandingIt is sensible to shore up pharmaceutical manufactures in the near-abroad. It would help keep costs low and boost realisations. We also need better branding for Indian pharma exports. But in parallel, we need to proactively improve drug quality and standards in domestic manufacturing. There is the need for capacity building and skill upgradation here, such as by setting up regional centres for development of drug formulations.